Green Hydrogen Electrolyser Market Poised for Rapid Growth, Projected to Reach 65.5 GW by 2030

The green hydrogen electrolyser market is poised for a dramatic surge, fueled by the global push for carbon neutrality and the urgent need to decarbonize energy systems. Green hydrogen—produced by splitting water using renewable energy sources like wind and solar—stands as a cornerstone of sustainable energy strategies worldwide. This news release explores the market’s current landscape, technological advancements, regional developments, and the opportunities and challenges shaping its future.
The Hydrogen Spectrum: Gray, Blue, and Green
Hydrogen is classified into three categories based on its production source:

• Gray Hydrogen: Derived from fossil fuels such as natural gas and coal, gray hydrogen is the cheapest to produce but generates the highest carbon emissions. It remains widely used in the chemical industry.
• Blue Hydrogen: An evolution of gray hydrogen, blue hydrogen integrates carbon capture and storage (CCS) technologies to reduce emissions, though this increases production costs.
• Green Hydrogen: The cleanest option, green hydrogen is produced via water electrolysis powered by renewable energy. While it carries the highest cost, it is essential for achieving true carbon neutrality.

The adoption of green hydrogen depends on three key factors:

1. Cost of Production: Electricity accounts for over 70% of green hydrogen’s production costs. Regions with low-cost renewable energy—termed "electricity price valleys"—hold a significant advantage.
2. Local Consumption: Proximity to chemical industrial parks or hydrogen-consuming facilities reduces storage and transportation costs, enhancing economic viability.
3. Substitution for Fossil-Based Hydrogen: In a carbon-neutral future, green hydrogen must replace coal- and gas-derived hydrogen, particularly in industries like chemicals and refining.

Technological Landscape: Four Pathways to Green Hydrogen
Green hydrogen production relies on four primary water electrolysis technologies, each with distinct characteristics:
1. Alkaline Electrolysis (ALK)

• Status: The most mature and fully commercialized technology.
• Cost: Offers the lowest cost among electrolyser options.
• Performance: In China, ALK electrolysers have achieved a hydrogen production scale of 2000 Nm³/h, with a DC energy consumption as low as 4.0 kWh/Nm³ (approaching a theoretical limit of 3.6 kWh/Nm³).
• Market Share (2025): Projected at ~70%, dominating the market.

2. Proton Exchange Membrane (PEM) Electrolysis

• Status: Advanced and commercially viable, though less mature than ALK.
• Cost: Higher than ALK, with costs 4-10 times greater due to reliance on imported components like proton exchange membranes and catalysts.
• Performance: In China, PEM electrolysers reach a production scale of 200 Nm³/h, with an energy consumption of ~5 kWh/Nm³. Advantages include:
  • Renewable Integration: Rapid start-stop capabilities and adaptability to fluctuating renewable energy inputs.
  • High Efficiency: Current density exceeds 10,000 A/m² (vs. 3,000-4,000 A/m² for ALK).
  • Purity: Produces hydrogen at 99.99% purity with low gas crossover, enhancing safety.
  • Response Speed: Avoids performance degradation seen in ALK due to carbonation of alkaline electrolytes.
• Market Share (2025): Expected to reach ~29%, reflecting growing adoption.

3. Solid Oxide Electrolysis (SOE)

• Status: In research and demonstration phases, not yet commercialized.
• Potential: Promises high efficiency but requires further development.
• Market Share (2025): ~1%.

4. Anion Exchange Membrane (AEM) Electrolysis

• Status: Early-stage development, combining ALK and PEM benefits.
• Market Share (2025): Less than 1%.

Current Trends
ALK technology currently leads due to its cost-effectiveness and maturity, while PEM’s share is rising thanks to its superior technical attributes and alignment with renewable energy systems. According to the International Renewable Energy Agency (IRENA), scaling electrolyser deployment is critical to achieving the 1.5°C climate target, with PEM offering a promising path despite its higher costs.
Market Growth Projections
The green hydrogen electrolyser market is on a steep upward trajectory:

• 2025: Installed capacity of 7.5 GW, with a market size of $2.35 billion USD
• 2030: Projected to soar to 65.5 GW, with a market size of $10.85 billion USD.
• Growth Rate: A compound annual growth rate (CAGR) of 52.3% for Installed capacity and 35.8% for market size from 2025 to 2030.

This rapid expansion is driven by escalating demand for clean hydrogen, increasing renewable energy investments, and supportive government policies.
Regional Developments: A Global Race
Countries and regions are vying for leadership in the green hydrogen economy:

• China: Leveraging its manufacturing capabilities and renewable resources, China is scaling up ALK and PEM electrolyser production.
• United States: Focused on innovation, particularly in PEM technology, backed by initiatives like the Hydrogen Shot.
• Europe: The EU targets 40 GW of electrolyser capacity by 2030, emphasizing both ALK and PEM under its Hydrogen Strategy.
• Japan and South Korea: Investing in domestic production and hydrogen import infrastructure.
• Middle East: Harnessing abundant solar resources to produce and export green hydrogen.

Opportunities and Challenges
Opportunities

• Technological Innovation: Advances in electrolyser efficiency, durability, and cost reduction—especially in SOE and AEM—could reshape the market.
• Policy Support: Subsidies, carbon pricing, and hydrogen strategies are fostering investment.
• Industrial Demand: Sectors like steel, chemicals, and transportation are increasingly adopting green hydrogen.

Challenges

• High Costs: Green hydrogen remains more expensive than gray or blue hydrogen due to renewable electricity and electrolyser costs.
• Infrastructure Gaps: Storage, transportation, and distribution networks require significant investment.
• Supply Chain Bottlenecks: PEM technology faces constraints from imported components, delaying full localization in markets like China.

Key Players and Their Technologies
The market features a diverse mix of companies:

• ALK Leaders: Green Hydrogen Systems A/S, HydrogenPro, John Cockerill, McPhy, Nel Hydrogen, thyssenkrupp nucera, PERIC Hydrogen Technologies, Cockerill Jingli Hydrogen, LONGi Hydrogen Technology, Sungrow.
• PEM Innovators: Electric Hydrogen, Elogen, ITM Power, Nel Hydrogen, Sungrow.
• SOE Pioneers: Bloom Energy, Sunfire, Topsoe.
• AEM Developers: Cipher Neutron, Enapter.
• Multi-Technology Firms: Hygreen Energy (ALK, PEM, AEM), Sunfire (SOE, ALK).

Market Trends and Future Outlook
The green hydrogen electrolyser market is at a turning point. ALK’s dominance will persist in the near term due to its cost advantage, but PEM’s technical superiority positions it for long-term growth as renewable energy integration deepens. By 2030, declining costs—driven by scale and innovation—could make green hydrogen competitive with fossil-based alternatives, aligning with global carbon neutrality goals. Collaboration across governments, industries, and innovators will be key to overcoming challenges and unlocking the market’s full potential.